Why Is Gas So Cheap Right Now?

The holidays arrived early this year for drivers. U.S. gas prices fell to $3.01 per gallon on Dec. 9, down from an all-time high of $5.01 three years ago, according to a AAA report. Fuel costs slid 8.1 percent over the past 12 months, even as overall prices rose 2.7 percent during that period, according to the latest Consumer Price Index (CPI).

“Russia’s invasion of Ukraine caused gas prices to soar, but prices have come back down as the oil market has improved,” says Andrew Gross, a AAA spokesperson who writes the company’s weekly fuel reports.

The cooler weather is also playing a factor in lower gas prices, Gross says. Put simply, Americans drive less in the winter, reducing demand at the pump. “This is the time of year that gasoline prices tend to bottom out,” he says.

It’s good news for the millions of Americans who are planning to drive to visit family over the holidays. “A record number of Americans traveled by car for Thanksgiving, and we’re forecasting a robust period of holiday travel this month,” Gross says.

AAA predicts the average national gas price will fall below $3-per-gallon in the coming days. But gas prices often vary state by state. Thirty-two states are already below the $3 mark. Currently the least expensive gasoline markets in the U.S. are Oklahoma ($2.52 per gallon), Mississippi ($2.62), Texas ($2.63), Arkansas ($2.63), Kansas ($2.67), Missouri ($2.69), Tennessee ($2.70), Iowa ($2.70), Louisiana ($2.73) and Kentucky ($2.74), according to AAA’s most recent weekly report. Hockley County, Texas has the lowest county average in the nation, at $2.30 per gallon.

The most expensive gasoline markets are Hawaii ($4.56 per gallon), California ($4.39), Washington ($3.99), Nevada ($3.66), Oregon ($3.53), Alaska ($3.46), Washington, D.C. ($3.22), Pennsylvania ($3.21), Illinois ($3.20) and Arizona ($3.18).

Gas prices tend to be higher in states that are farther from major oil supply sources such as refineries, ports, and pipeline and blending terminals, according to the U.S. Energy Information Administration. Local and state taxes can also drive up prices at the pump.

How to save money on gas

Here are six ways you can save even more on fuel.

Compare prices. The next time you need to fill up your tank, don’t just pull up to the closest gas station. “There could be a difference of up to 60 to 80 cents per gallon between gas stations that are close to each other,” Gross says. “You could even find significantly cheaper gas at the gas station across the street.”